CELIMO – the group of European associations representing importers and distributors of manufacturing technology – has released its State of Trade report along with a commentary;  this is summarised here but the full version is in the document attached below.

There was a strong pace of GDP growth in most countries in 2021 although this is, of course, mainly because of the large declines that most countries saw in 2020;  most countries expect to see the rate of growth of GDP slow in 2022 but it will still be positive.  The Purchasing Managers’ Index (PMI) for manufacturing has been above the crucial 50 level everywhere over the past 4 months.

Turkey has a very high inflation rate but otherwise countries generally fall into two groups – one with inflation above 6% and the rest where it is between 3% and 6% although Switzerland is the other outlier in this data with a very low inflation rate.  Similarly, there are three groups of countries in the unemployment data;  Spain and Turkey are in the highest group with an unemployment rate above 10% followed by those with unemployment between 6% and 10% and the final group with a low unemployment rate (around 4% or less).

Three countries – Finland, Netherlands and Spain – had exceptional growth in percentage terms in machine tool sales in 2021 although, as with the GDP data, this at least partly reflects a very large fall in 2020.  There was also strong growth in Turkey and Italy.  The fall in the market in Germany is the data trend for the first three quarters of the year rather than an estimate of the full year trend.  Only Austria (marginally), the UK and Germany expect stronger growth in machine tool demand in 2022 than in 2021.

Growth in demand for cutting tools is more modest than for machine tools.  The main reason is that demand was less affected during the downturn in 2020 as, in many cases, customers were still busy even if they did not invest in new machinery.  The shortage of components and other supply chain issues is also affecting tooling demand, especially from the automotive industry.

More generally, there were some common themes in the comments on this report.  Most customer industries were reported to have strong demand with the automotive and aerospace sectors the weakest;  the automotive industry has seen the largest impact from the shortage of electronic components, and this is holding back output which in turn lowers demand for tooling.  The main areas of concern in most countries are delivery times, prices for materials and components and increasing salaries to match rising consumer prices driven by rising energy and other prices.

You can follow CELIMO on both Twitter (@celimo_eu) and LinkedIn (@celimo-eu) for news and regular economic updates.

State of Trade Report Commentary (Feb-22).pdf

State of Trade Report (Feb-22).pdf

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